Gov't greenlights 2012-2014 economic forecast
http://www.rbcnews.com/free/20110422114711.shtml
RBC, 22.04.2011, Moscow 11:47:11.The Russian government has approved the social and economic forecast for 2012-2014.
Under the forecast on which the federal budget for 2012-2014 will be based, the price of Urals blend oil is expected to average $105 per barrel in 2011 amid tensions in Arab countries, a rebound in oil consumption in developed economies, strong demand for oil in developing economies and high liquidity on global markets.
The price of oil is expected to fall to $93 in 2012 due to anticipated stabilization of oil supplies and slower economic growth in oil importing countries and increased tightening of benchmark interest rates on the part of central banks. In 2013 and 2014, oil prices are expected to retrace to $95 and $97, respectively, on the strength of higher oil consumption.
Under this forecast, bank lending is expected to increase and the government is expected to remain committed to moderate tariff regulation. Russia's GDP is projected to expand by 3.5%-4.6% in 2012-2014.
April 22, 2011 10:56
Capital flow to funds investing in Russia, CIS totals $79 mln for week – experts
http://www.interfax.com/newsinf.asp?id=238693
MOSCOW. April 22 (Interfax) - The inflow of capital to funds that invest in Russian and Commonwealth of Independent States company stocks totaled $79 million April 14-20 after it reached $262 million the week before, according to Emerging Portfolio Fund Research (EPFR).
Analyst at the investment company UniCredit Securities Vladimir Kuznetsov said that since this year began - or over the past 16 weeks - there was only one week when an outflow of capital from funds investing in Russia was observed. Total inflow to Russian funds came to $4.2 billion from Jan 1 to April 20.
These funds have already attracted 25% more this year than they did in all of last year, Kuznetsov said.
Capital flow into Global Emerging Markets funds also continued and totaled $615 million last week versus $1.643 billion the week before.
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April 22, 2011 10:19
Russian GDP up 4.2% in March - Klepach (Part 2)
http://www.interfax.com/newsinf.asp?id=238681
MOSCOW. April 22 (Interfax) - Russia's GDP increased by 4.2% year-on-year in March 2011, Deputy Economic Development Minister Andrei Klepach said at a briefing at the White House following a government meeting on Thursday.
Excluding seasonal and calendar factors, GDP increased by 0.3% in comparison with February.
Russia's GDP grew 4.4% year-on-year in the first quarter as a whole.
March produced a slight growth in investments, Klepach said - 1.5% from February adjusted for seasonal and calendar factors. "There was no surge in March, investment growth was not steady," he said.
Retail trade (adjusted for seasonal factors) was roughly flat with the previous month in March.
Klepach pointed out that construction had begun to grow and that production of domestically made equipment is on the rise. "As a result, we expect that this will produce a serious surge in investment, and then we will move to roughly 6% growth in investments in fixed capital for the year," he said.
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Putin's Cabinet Plans to Up State Spending
http://www.themoscowtimes.com/business/article/putins-cabinet-plans-to-up-state-spending/435559.html
22 April 2011
By Anatoly Medetsky
The Cabinet agreed Thursday to boost spending by 4 percent this year as soaring oil prices push revenues up.
Federal expenditures would grow by 420 billion rubles, Prime Minister Vladimir Putin said, bringing the total to about 11.1 trillion rubles.
The measure has to pass the parliament and gain President Dmitry Medvedev's approval — a mere formality — to take effect.
A significant part of the additional spending, Putin said, would go toward raising retirement pensions later this year — a decision the government will make depending on the inflation rate in the year's first half. Some of the money will pay for higher salaries for schoolteachers, renovation of museums and libraries and provision of technical aids to the handicapped, he said.
Putin said 180 billion rubles would be used to support the economy's industrial sector, with another 13 billion rubles going to the agricultural sector. He didn't elaborate.
Another 62 billion rubles will serve as the government's contribution to the international equity fund Medvedev ordered to be created jointly with foreign capital to foster foreign investment in non-energy businesses. VEB, which has been designated to manage the government's involvement in the fund, and Putin, as its chairman, will discuss the issue Friday.
The Cabinet also started working on next year's budget Thursday by approving anticipated scenarios for economic development for the period — assumptions the Economic Development Ministry often rewrites several times a year, given the country's dependence on the volatile oil price.
The basic scenario backed Thursday assumes that Russian oil will sell for an average of $93 a barrel, down from the latest official estimate of $105 for this year, which gained the Cabinet's endorsement at the same session, Deputy Economic Development Minister Andrei Klepach said after the meeting.
The economy will expand by 3.5 percent, down from the 4.2 percent expected this year, he said.
One of the reasons for the slower growth will be swelling imports, he said. This year alone, imports are projected to increase 20 percent, while demand will only be 10 percent higher, Klepach said.
"Our products are not competitive so far," he said.
Before the Cabinet session, Putin met with senior members of the Russian Union of Industrialists and Entrepreneurs, a big business lobby group, to discuss — among other things — the ruble exchange rate, which could harm exporters if it stays at the current level or strengthens further on the back of expensive oil. Putin ordered the Central Bank and the Finance and Economic Development ministries to get together to consider ways of influencing the rate, said billionaire union member Viktor Vekselberg.
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